The number one reason that sellers need to be aware of the comps is because Appraisers depend on sold comps (comps that have sold within the last 3 – 6 months for their appraisals). Many buyers need or want to use a loan in order to purchase a property. Lenders require an appraisal. The Appraiser looks at the subject house and does a detailed analysis using the comps, adjusting for various factors. Does the house have a pool or not? Has it been remodeled recently or not? What is the size of the house compared to the comps? What is the size of the lot compared to the comps? Does it have amazing views or not? Is it on a busy street or not? All these factors play into the appraisal.

It can be trickier for an appraiser in areas that are not “cookie-cutter”, where the homes are all very unique, many built in varying years, many original vs. remodeled vs. recently remodeled. Some may have 2 or 3 or 4 or even 5 bedrooms, and a varying number of bathrooms. The architectural styles vary. Views vary. The factors that can make a difference are many! One thing sellers and listing agents should request from lenders to help get a more accurate appraisal is for the appraiser to be a reputable local appraiser, who is more familiar with the market here in the desert.

What Happens When The Home Doesn’t Appraise?

Many people assume that appraisals “magically” come in at the purchase agreement price. This happened often in the heyday of booming real estate prices in the years 2000 to 2006 but then home prices started falling and they really fell after the financial crash in September, 2008. They didn’t start climbing back up until about 2012. Even since that crash, lending practices and regulations were changed dramatically. Appraisers were selected using different criteria, and gone were the days that sellers could count on their properties appraising.

Today, one still cannot assume that the appraisal will come in at the price in the Residential Purchase Agreement.

If you price your home according to sold comps, real comps, then the likelihood of the property appraising greatly increases, and there is less stress involved.

If you have priced your house with a pie-in-the-sky price, in spite of the comps the Realtor has dutifully showed you, then there is a high likelihood that your house will NOT appraise.

What happens when this unpleasant “surprise” rears its ugly head? There are a variety of possible outcomes.

In the Worse Case Scenario

The worst case scenario is that the deal will fall out of escrow if either party is unwilling to renegotiate the price. However, typically, when there is a serious seller and serious buyer involved, then the purchase price is re-negotiated.

The Best Case Scenario for Sellers

In a case where there are multiple offers, this situation can favor the seller, because the buyer may want the house so badly, that the buyer will fill the entire gap between the purchase price and the appraisal, even if it’s $100,000 or more! It can happen!

However, multiple offer situations are not often the case here in the desert, where secondary homes are common and there is a fair amount of inventory.

If the buyer is NOT in a position to come up on the price, because they have an FHA loan, and they do simply do not have the funds to cover any of the gap between the purchase agreement price and the appraisal, the seller sometimes will opt to cover the entire gap. Another reason for this, is that an FHA appraisal stays WITH the property for six months, so if another FHA buyer comes along to make an offer, if the original offer falls out of escrow, that FHA appraisal will still be in force. So if the seller is serious in selling, during that time frame, they have little choice but to come down in their price.

This is also true of a buyer who is only willing to pay the appraised price, and the seller just wants to sell quickly and agrees to sell their property at the appraised price.

Needless to say, this situation generally increases the stress level for all parties involved.

Ground Hog Day or Make That Price Adjustment?

If the seller fails to lower their price to “fair market value” after a deal falls out of escrow due to a low appraisal, they may find themselves facing a Ground Hog Day kind of experience… a deja vu experience. Why not just price it right for the market and cut the stress level for yourselves?

Yes, some people do get lucky, and get that out-of-town buyer with cash to burn, and is able to make an all cash offer, who falls in love with your house and simply impulsively makes an offer that is close to or matches your pie-in-the-sky list price! In that case, you had better seek to have a quick escrow, say close escrow in 10 days, before they change their minds!

Perhaps you yourself were that out-of-towner who made that impulse buy on the property years ago, and so you think that it will happen again. It very well could happen again, but I would not count on that. It does happen, but not very often. Say it’s been sitting on the market for almost six months now, and a buyer wants to buy it for “fair market value”. The worst case scenario, is that you have enjoyed the home for several years, and if you decide to sell it for the “fair market value” price that the buyer offers, you might even have to report a loss after all the closing costs. Look at the bright side! Then you won’t have any taxes to pay! In the meantime, if you paid all cash, you will get that cash back to invest in something else that you might want to. If you are Canadian, then there is the benefit of the better exchange rate from US dollars to Canadian dollars.

In the desert, a popular resort area, many homes are secondary homes, and so sellers often do not need the furniture for their primary home or another secondary home. That is why many sellers opt to include their furniture with the sale of their house. The furniture is worth more WITH the house, rather than if sold separately from the house. It also helps to sell the house for best value and more quickly.

Many buyers of secondary homes will be more attracted to a home if it is tastefully furnished with lightly used furniture, and, better yet, if it is offered turn key furnished with all the kitchen utensils, etc. In other words, the motto “Just bring your toothbrush!” is very appealing idea to a buyer of a second home or even primary home. This will often give your property an advantage to sell more quickly. So you might as well take advantage of it if this is an option for you!

If you try to sell your furniture in a yard sale, or using an on-line service like craigslist or OfferUp, even if it is very high end furniture or rare antiques, you will get likely get pennies on the dollar and it will be time-consuming as well.

If you sell your furniture using a consignment store, they will only select some items that they are interested in selling in their store, and they will take a consignment fee of at least 38% of whatever they sell it for. This can be a good option if you have a lot of high-end furniture in good condition. They can come and pick it up if there are enough items.

Items that you can’t sell easily or quickly or are of insignificant value, you can always donate to a local thrift store like the Angel View Thrift Stores for charity throughout the valley, who can pick up your items and give you a form to complete which you can use as a tax deduction.

Items that you want to keep, you obviously have the option to arrange that a reputable moving company pick them up and move them to wherever you want.

Some people think that a realtor just wants to make more commission by including the furniture with the sale of the home, however, considering the furniture is generally worth $5000 to $20,000, that is very negligible, and not the goal of the realtor. The goal of a realtor is not just to list your home, but to get it SOLD at the best price the market will bear in a timely manner.

Sometimes buyers don’t want any items or they want just a few items, and in that case it actually is an inconvenience for many sellers to arrange to remove the items.

Bottom line is, the goal is to sell the property at the best price that the market will bear and in a timely manner. If a buyer makes a good offer on the home and wants the furniture to be included with the sale of the home, then it is advisable to agree to that. If they are using a lending institution, then it will be stated on a separate Addendum that the furniture is sold at zero value with the sale of the home, because lenders do not lend on furniture.

Every situation is different however the above is a guideline for standard practice here in the desert. Unless you have a special attachment to your furniture and can use it elsewhere, it generally has more value if sold with the house. If you have any questions about this, please let me know! I can be reached at 1-760-587-6009 or you may e-mail me at wendysdesert@gmail.com.

Behind the gates of the prestigious golf community of Mira Vista in Rancho Mirage are spectacular views of mountains, lakes, streams, trees, the golf course and greenery. The luxury homes were built by the renowned Toll Brothers, around 2001 to 2003, and range in size from around 2331 square feet to around 4372 square feet. Contemporary Tuscan seem to describe the style of architecture. Elegance and tranquility describe the spacious, sun-filled interiors.

Featured Property:
21 Calle Del Norte, Rancho Mirage

In a word: Beautiful!

This elegant 3 bedroom / 4 bathroom, 3422 square foot property offers great views of the lake behind it surrounded by mature trees and flowers, as well as some of the Westin Mission Hills golf course, which is far enough away to allow privacy. It boasts its own salt-water heated pool and spa with beautiful lake views.

A sparkling salt-water pool and spa with pebbletec finish

Tranquil lake views

There is ample sunlight streaming through the variety of windows, walls of glass and clerestory windows, allowing for the views of the beautiful surroundings to be fully enjoyed. The interior is classic European with crown molding, baseboards and wainscoting, painted in creams, whites and golds. Each bedroom has en suite bathrooms and their own entries to a private patio. The master bedroom has two large walk-in closets, a spacious bathroom with doorless shower and a jet tub and plenty of counter space and dual sinks.

Spacious master with 2 walk-in closets

There is a large living room area, with a wet bar, and also a formal dining area that is adjacent to the kitchen which features a big opening so plates can be passed over the counter and the chef can converse with dinner guests while in the kitchen. Granite counter tops and a granite-topped island with a stovetop with a ventilator fan panel that rises up or down with a push of a button. A laundryroom is between the kitchen and the garage, which is two car and has an immaculate epoxy floor.

Great kitchen for cooking!

All stainless steel appliances are included. The two built-in convection overs are perfect for creating multiple dishes. There is a breakfast nook that has views of one of the courtyards. This home is an entertainer’s delight, with plenty of room for guests to relax and enjoy the views and a beverage from the wet bar.

Great for entertaining!

Plenty of room for guests

This tasteful and refined home is not offered furnished, however many furnishings are negotiable outside of escrow. The list price for this home is an amazing deal: $699,900, which is the lowest price per square foot in Mira Vista at only $204 per sq. ft. The HOA dues are low: $305/month which includes all common area landscaping, a guarded gate, tennis courts, a community pool, spa and clubhouse and more.

Tennis courts at Mira Vista beckon!

The sellers have moved out and are ready to travel the world. This is an amazing opportunity for someone who wants a spacious home in the coveted community of Mira Vista in Rancho Mirage, a desert city with the nick name of “Home to Presidents” since so many presidents have lived here, including President Eisenhower, and Gerald Ford, who have streets named after them. President Obama has visited this city on numerous occasions to relax and play golf. Golfing is available at the Westin Mission Hills Golf Course and the Mission Hills Country Club.

The Westin Mission Hills Golf Course weaves its way around the Mira Vista community, yet there is plenty of privacy

Not far from this choice property is The River, which has a huge movie theatre, boutiques and stores such as Forever 21, and many popular restaurants including PF Chang’s, Fleming’s and The Cheesecake Factory.

Call me, Wendy Campbell, a realtor with Power Brokers International, for a private showing or to find out when an open house will be happening, at 760-587-6009. This is a must see!